Company Owned Life Insurance - COLI
- A type of life insurance policy taken out by a company on the lives of employees whom the company considers to be of vital importance to its operations. Under this type of plan, the company in question pays the premium on the insurance but is also the plan's primary beneficiary.
There are a few reasons why a company would take a life insurance policy out on key employees. For one, the tax-free proceeds that are received after the death of a key person can be used to cover any costs that would arise when hiring that individual's replacement. The insurance policy can also be used to cover employee benefit liabilities.
However, the most notable benefit to a company that institutes a COLI policy comes from the benefit to after-tax net income. This benefit arises when the cash value of the policy becomes larger than the premiums paid. According to an industry survey conducted in 1999 and cited by New York Life Insurance Company, 68% of the Fortune 1000 companies use COLI programs.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
Life insurance — The foundation of life insurance is the recognition of the value of a human life and the possibility of indemnification for the loss of that value. F. C. Oviatt, Economic place of insurance and its relation to society Life insurance is a… … Wikipedia
Life Insurance Corporation of India — Infobox Company company name = Life Insurance Corporation of India company company type = Government owned corporation foundation = September 1, 1956 location = Headquarters in Mumbai, India (Various other locations in India and abroad) key… … Wikipedia
Life insurance in India — Life Insurance is the fastest growing sector in India since 2000 as Government allowed Private players and FDI up to 26%. Life Insurance in India was nationalised by incorporating Life Insurance Corporation (LIC) in 1956. All private life… … Wikipedia
Stranger Originated Life Insurance — (STOLI) is a life insurance arrangement, in which speculators, who have no relationship to a person, initiate a insurance policy against their life and fund the premium payments for investment purposes. [cite web… … Wikipedia
China Life Insurance Company (Taiwan) — This article is about China Life Insurance Company in Taiwan . For China Life Insurance Company in Mainland China, see China Life Insurance Company. China Life Insurance Company Limited 中國人壽保險股份有限公司 Type Privately owned company Industry Life… … Wikipedia
Union Labor Life Insurance Company — The Union Labor Life Insurance Company (ULLICO) is a privately held life and health insurance company in the United States. ULLICO was founded in 1925 by the American Federation of Labor (AFL), which wanted to offer working people affordable… … Wikipedia
Acacia Life Insurance Company — The Acacia Life Insurance Company was established in 1867 as a mutual insurance company, owned by its policyowners. Its headquarters are in Washington, D.C. In 1997, it formed a mutual insurance holding company, Acacia Mutual Holding Company of… … Wikipedia
National Income Life Insurance Company — Type Subsidiary of Torchmark Corporation Industry Life insurance Founded 2000 Headquarters … Wikipedia
Massachusetts Mutual Life Insurance Company — MassMutual Type Mutual company Industry Financial Services Founded Springfield, Massachusetts, USA (1851) Headquarters … Wikipedia
China Life Insurance Company — This article is about China Life Insurance Company in Mainland China . For China Life Insurance Company in Taiwan, see China Life Insurance Company (Taiwan). China Life Insurance Company Limited 中国人寿保险股份有限公司 Type Public (SEHK: … Wikipedia
National Life Insurance Company — was chartered on November 13, 1848 “upon the principle of mutual participation in the funds or profits” of the company. As such, the National Life of Vermont was a mutual company even though that fact was not apparent from its name. The company… … Wikipedia